The owners of Dublin's Clarence hotel, who include Bono, The Edge and businessman Harry Crosbie, have reportedly paid around €5 million to the owner of a neighbouring property after he agreed to withdraw an appeal to An Bord Pleanála against their plans to enlarge the hotel.
Under the terms of the settlement the hotel is to get ownership of the adjoining three-storey building at 10 East Essex Street in Temple Bar where Richard Coffey ran a coffee shop, Central Percs, for several years. His family has owned the modest 19th-century premises for the past 96 years.
Mr Coffey, the only objector to the huge extension to the hotel, has formally withdrawn his appeal against the planning decision by Dublin City Council. He had complained that the proposed seven-storey wing at 8 and 9 Essex Street would be too high and would seriously impact on the character of the area.
Mr Coffey, who lives over the shop, admitted yesterday that he had got "a good price for the property", but said it was "ridiculous" to suggest that the payment was €5 million.
However, sources close to the hotel owners confirmed that the figure "was in that general area".
That level of payment would be all the more surprising given that the market value of the Essex Street building is estimated to be around €2 million.
However, developers frequently have to pay over the odds to clear the way for building operations as lengthy planning delays can be costly and frustrating.
In the case of the hotel, the planned €35 million extension is part of a long-term programme to allow the Clarence to be designated as one of the top hotels in the world.
It is currently lagging behind because of the absence of a number of facilities, including a swimming pool and spa.
The hotel can now provide these facilities, and increase the number of bedrooms from 55 to 90. The acquisition of 10 Essex Street will open the way for an even larger extension to include offices, shops and conference facilities.
The hotel is planning to bring in a number of new investors as part of the latest development phase.
The last accounts for Brushfield, the holding company for the hotel, showed that it made a pre-tax loss of €302,000 in 2003. The hotel ended the year with accumulated losses of €11.2 million.
